By JOHN P. TRETBAR
U.S. crude prices reached six-week highs last week, topping $72 a barrel for only the third time in two months. Prices have now retreated somewhat. By lunchtime Monday, the near-month contract for West Texas Intermediate Crude on the Nymex was down 88 cents to $71.09 per barrel.
Crude prices in the Sunflower State are also higher. Kansas Common crude at CHS in McPherson starts the week at $62.25 per barrel, up two dollars from a week ago, up nearly five dollars from the first of the month, and up nearly $25 a barrel over prices at the first of the year.
The weekly Rotary Rig Count from Baker Hughes shows 512 active drilling rigs across the country, an increase of ten oil rigs. The count in Texas was up four, Oklahoma was up three and New Mexico was up two rigs from last week.
The Rig Count in Kansas was up three in the eastern half of the state at 12 active rigs. The count was unchanged in Western Kansas at 25. Independent Oil & Gas Service reports drilling underway on two leases in Ellis County.
Kansas regulators approved 39 new drilling permits last week. There were 24 in eastern Kansas and 15 west of Wichita, including three in Ellis County and one each in Russell and Stafford counties. That's 732 new drilling locations across Kansas so far this year.
Operators completed four new wells in Ellis County and two in Barton County, out of 22 new well-completions in Western Kansas last week. Independent Oil & Gas Service reported nine new drilling locations in eastern Kansas.
The Energy Information Administration said U.S. crude inventories dropped by nearly six-and-a-half-million barrels last week. At just over 417 million barrels, stockpiles are about seven percent below the five-year seasonal average.
EIA said U.S. crude imports for the week through September 10th were down 48,000 barrels per day from the week before. The four-week average is more than 13% higher than the same period last year. The U.S. is currently importing an average of more than 5.8 million barrels of crude oil per day.
Domestic crude-oil production increased by more than 100,000 barrels per day last week, to just over 10.1 million. That's also a slight improvement over the same week a year ago according to weekly government reports.
The U.S. Energy Information Administration last week reported 5,713 drilled but uncompleted, or (DUC) wells across the United States last month. That's the lowest monthly tally since November 2017. EIA says the decline reflects more well completions and less new-well drilling activity. DUCs declined by 248 wells across the U.S. Most of the declines are in the Permian Basin of Texas and New Mexico, but the counts dropped in each of the major shale regions tracked by the government.
The biggest North American railroad merger in two decades takes a new turn. Kansas City Southern (KCS) now says it will reunite with Canadian Pacific Railway, and will spurn a larger merger offer from a larger rival, Canadian National. KCS said the deal with Canadian Pacific is worth roughly $27 billion. The move comes less than two weeks after U.S. regulators rejected a voting trust for the larger deal. The merger will create the only end-to-end, crude-by-rail network from Canada to Mexico.
Construction is now scheduled to begin next year on the first new refinery to be built in the U.S. in nearly 50 years. The controversial Davis Refinery in Belfield, North Dakota faced several delays from regulators because it's planned just three miles from the Theodore Roosevelt National Park. The CEO of the Meridian Energy Group says his company has entered into a binding construction contract with an engineering firm in Houston.
July crude production in North Dakota was down 56,000-barrel-per-day, or nearly 5 percent, at just over 1 million barrels per day. The Department of Mineral Resources says the state's gas-capture statistic is also down for the month, as operators had to burn or vent 10% of the natural gas produced at their oil wells. That's up 2 percent from June.